At the first of a series of hearings on the governor’s fiscal 2014 state budget recommendation, held at the State House on Feb. 14, House and Senate budget committee members expressed reservations about his plan to raise $1.9 billion annually by reshaping the state’s primary taxes.

The governor’s chief budget officer, Administration and Finance Secretary Glen Shor, told committee members that the budget plan would invest in the state’s “calling card” – education and transportation infrastructure – and that the ambitious plan would make the state stronger in the long term. The intent, he said, is to “create growth and opportunity in every corner of the Commonwealth.”

While legislators have pledged to keep an open mind, the scope of the tax plan has left many concerned about its impact on the economy and on taxpayers who are still recovering from an extended recession.

The governor’s plan would increase the personal income rate from 5.25 percent to 6.25 percent, double the personal income tax exemption, reduce the sales tax rate from 6.25 percent to 4.5 percent, and eliminate or reduce more than 40 tax exemptions and deductions.

The new funds would be used to increase education spending by $550 million next year for early childhood education, K-12 education, and higher education programs. The plan would also increase funding for transportation by $269 million through a new dedicated share of the sales tax, gaming revenues related to casino licenses, and from an increase in gas tax collections that would result from indexing the rate to inflation.

The new revenues would be used to fund transit authorities, start reducing state transportation operating costs paid from bond funds, and pay for debt service on the $100 million increase in Chapter 90, the local road and bridge program.

Rep. Brian Dempsey, chair of the House Ways and Means Committee, said the governor’s budget recommendation was particularly challenging this year because of its significant tax policy changes, including the elimination of exemptions and deductions. He said budget committee members want to consider the impact of the changes on citizens and the economy.

Sen. Stephen Brewer, chair of the Senate Ways and Means Committee, said there is a lot of uncertainty in state finances as the Legislature starts work on the budget, including concerns about tax collections for the rest of fiscal 2013 and the possibility of federal sequestration cuts that could have a serious impact on Massachusetts. Brewer said the Legislature will wrestle with all the issues, and he would not rule anything in or out at this point.

The House and Senate ways and means committees have scheduled eight public hearings through the first week in March at locations across the state, with each hearing focusing on a different set of spending categories.

A hearing on school and municipal aid accounts will be held Feb. 26 in Greenfield. The MMA plans to testify in support of the governor’s call to increase unrestricted municipal aid by $31 million and to fully fund the state’s school aid obligations.

The House budget committee is expected to release a budget bill on April 10 for debate and approval by the end of the month. The Senate customarily completes action on its state budget bill by end of May.

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